Cloudflare raises full-year forecasts, tech spending bounces back

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Compared with its earlier forecast of $1.280 billion to $1.284 billion, Cloudflare now sees 2023 revenue in the range of $1.283 billion to $1.287 billion

Sending its shares up nearly 6% in extended trading, the software firm Cloudflare raised its annual revenue and profit forecasts after delivering better-than-expected results for the second quarter on Thursday.

As cooling inflation and the recent strength in consumer activity signal a stabilising macroeconomic outlook, companies are increasing their expenditure on technology.

Compared with its earlier forecast of $1.280 billion to $1.284 billion, Cloudflare now sees 2023 revenue in the range of $1.283 billion to $1.287 billion. Also, it raised its adjusted per-share profit forecast by more than 2 cents.

Grouped as content delivery network (CDN) services that help companies manage their applications on the internet, San Francisco, California-based Cloudflare sells tools and software. In 2009, it was founded and went public at a valuation of over $4 billion in 2019.

Inching past analysts’ average estimate of $305.6 million, its revenue grew 32 percent to $308.5 million for the quarter ended June 30.

Compared with 75.7 percent in the preceding quarter and 76.2 percent in the corresponding quarter last year, gross profit margin, a key measure for software businesses with high recurring revenue, came in at 75.6 percent.

While analysts expect $329.4 million, the company forecasts third-quarter revenue of between $330 million and $331 million.

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